Valuenotes, recently published a report, titled "Offshoring Legal Services to India". The report costs USD 395, I just wish I had that kind of money to buy and comment on the report.
For the starters, I'm not very in agreement with the following numbers highlighted by the report:
- Currently, legal services offshoring from India generates $61 million in revenues; this is expected to grow nearly 10 times to reach $605 million by 2010 and cross $I billion by 2015.
- ValueNotes estimates the current employment in the Indian legal services offshoring segment at around 1,800, but expects this to grow to 24,000 by 2010.
Now, lets do some high school math. 1800 people earning $61 million. Ahem! So that is $34,000 per person per year employed in the industry. At a normally accepted figure of 2000 working hours per person per year, the billing rate comes to about $17. Couple of things:
1. I don't think the players mentioned in the report (see below) employ 1800 people.
- Law Firm Captives: dedicated centers of international law firms like Lexadigm, Intellevate and NewGalexy.
- Corporate Captives: In-house legal departments of companies like GE, Cisco, Oracle, Dupont.
- Third party "niche" vendors: focus on providing only legal services, such as IP PRO, Patent Metrix, Pangea3, Mindcrest and Quislex.
- Third party Multiservice BPOs: offer offshore legal services along with other services, and include the likes of Evalueserve, Datamatics, WNS and Manthan
Evalueserve with about 150 people (or probably lesser) in the intellectual property division (the only offering from Evalueserve that falls under legal outsourcing) is the biggest group in the space in the country. And they're 150 today, not for the entire past year. Other players are much smaller. The average number of employees that these companies would have had (those who contributed to the "$61 million") is not more than 25 people per company. So we'd need about 72 players. Heh! The report primarily mentions only 16 of them. The rest are probably imaginary shops and thus imaginary revenues.
2. $17 average effective billing rate for a really nascent industry? Someone pinch me!
I'd like to see more comments on the report. Comments solicitied.
